Implications
One possible criticism is that the decision in Drexel was a reversal of the Supreme Court’s position on excise taxes since the early 19th century and that this decision is out of line with Supreme Court rulings before and after. As a general rule, the court repeatedly favored the federal power to tax. In other cases, the court has upheld Congress’s excise tax on narcotics, marijuana, and firearms. Even with the firearms case, the Court admitted the law was unmistakably a legislative purpose to regulate rather than tax.
Despite this reversal of philosophy regarding Congress’s ability to regulate through the tax code, the Court’s definition of the Child Labor Tax as a penalty due to its characteristics featured prominently in the majority opinion in National Federation of Independent Business v. Sebelius, penned by Chief Justice John Roberts in 2012. The opinion holds that the individual mandate at the center of the Patient Protection and Affordable Care Act does not fulfill any of the characteristics (i.e., the heavy burden of tax for even slight infractions, the requirement of scienter in levying the tax, and the use of the Department of Labor to aid in enforcement) that allowed the Court to consider the Child Labor Tax as outside of Congress’ “Power To lay and collect Taxes, Duties, Imposts and Excises”, and therefore, the individual mandate may be considered within that power.
Previously, in Hammer v. Dagenhart, 247 U. S. 251, the Court ruled a law prohibiting the transportation in interstate commerce of goods manufactured with child labor was unconstitutional. After the court rejected both attempts by Congress to regulate child labor, Congress proposed a constitutional amendment which would give the national government the power to regulate and prohibit child labor. Unlike most proposed amendments, this did not have a deadline for state’s ratification. The proposed amendment eventually failed to achieve ratification, as many states passed their own child labor laws, making a federal amendment unnecessary. In addition, in 1938, Congress enacted Section 212 of the Fair Labor Standards Act which prohibited the transportation of goods in interstate commerce made from "oppressive child labor."
Read more about this topic: Bailey V. Drexel Furniture Co.
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